Texas Home Foreclosures Are Soaring

Home foreclosures climbed significantly in Texas in 2023, with the north of the state reportedly recording a 19 percent increase from 2022, according to local outlet Dallas News.

There were a total of 28,533 properties posted for forced sale last year in Texas, according to the news outlet, which was using data from real-estate group ATTOM. Only California counted more homes facing foreclosure, for a total of 29,180 such filings. Newsweek contacted ATTOM for comment by email on Monday morning.

The rise of home foreclosures in Texas was reflected nationwide. According to ATTOM's Year-End 2023 U.S. Foreclosure Market Report, foreclosure notices were reported on 357,062 properties across the country last year, up 10 percent from 2022 and 136 percent from 2021. Compared to 2019, filings were down 28 percent nationwide.

North Texas, where home prices more than doubled in the last 10 years, was particularly affected; there were a total of 6,348 home foreclosure filings in the more than a dozen counties part of the Dallas-Fort Worth metro area. Most of them were in Dallas County, with 2,394 properties scheduled for sale by lenders, and Tarrant County, with 1,578 filings.

While foreclosure filings were up last year compared to 2022, they were still lower than before the pandemic hit. In 2019, home foreclosure filings in North Texas were a total of 8,195. Almost no home foreclosures—when a lender forces the sale of a property after a borrower has stopped making payments for their mortgages—took place in Texas during the pandemic, when the federal government imposed a moratorium for residential properties.

Home foreclosures in North Texas reached a record high in 2006, according to Dallas News, just before the Great Recession of 2008 to 2009, when 38,352 homes were posted for foreclosure.

Not all of the homes in Texas' foreclosure filings were taken away from borrowers. In many cases, borrowers reached a new debt deal with lenders or sold the property before foreclosure.

Rob Barber, CEO of ATTOM, said that the 2023 rise in home foreclosure filings shouldn't be cause for alarm. "It signals a return to more traditional patterns after years of volatility," he said.

"Our data suggests that, while foreclosure activity may fluctuate, it's unlikely to approach the highs seen in the last decade," Barber added. "Instead, we foresee a market that is more reflective of broader economic trends, with foreclosure filings becoming a more predictable aspect of the housing landscape. This shift offers a silver lining—the opportunity for investors, homeowners, and industry professionals to plan and strategize with greater confidence and insight."

The Dallas Morning News real-estate editor Steve Brown told the Texas Standard that he isn't worried about the surge in home foreclosure filings because people have so much equity in their houses right now that, faced with a potential forced sale, they can just sell the house.

"You sell the house, and you give the bank their money, and you take whatever money's left and you go your way, so long as people have so much equity in their houses," Brown said.

The number of homes repossessed by lenders nationwide in 2023, 42,090, was download 2 percent from 2022, and down 71 percent from 2019.